Apple (AAPL) by all accounts had a terrific holiday season. The Apple Stores were packed, and Macs, iPods and iPhones were shipping in record numbers. On Christmas day alone, Steve Jobs announced at Macworld last week, the company sold 20 million songs.

Then the market tanked, and Apple’s shares, having more than doubled in 2007, went into free fall. As the Dow dropped 10 percent, Apple dropped more than 20 percent, from a record high of 202.96 to just over 161.36 last Friday.

This will presumably change on Tuesday, when the company reports its quarterly earnings. If nothing else, day traders are likely to load up on the stock and it options, anticipating that Apple will easily beat its projected $1.42 earnings per share on sales of $9.2 billion — guidance that was considered uncharacteristically unconservative when it was offered three months ago. The street consensus is now $1.62 EPS on $9.47 billion. Piper Jaffray’s Gene Munster, always the optimist, is looking for $1.73 on $9.73 billion, and as of Jan. 14 was still calling for a price target of 250.

Even Munster doesn’t expect that kind of bounce when earnings are announced after Tuesday’s market close. What he and the other analysts will be tuning in for is the conference call that starts at 5 p.m. ET. (You can listen to the webcast here.) How Apple’s shares behave in the weeks ahead will depend on a handful of key numbers to be revealed in that call. Here are the ones the traders who hang out at The Mac Observer’s Apple Finance Board will be listening for:

• Earnings per share. Beating guidance and meeting the street consensus is a given. The traders here are whispering about $1.80 per share, and even that wouldn’t equal the 73 percent year-to-year earnings growth Apple has achieved over the past four quarters. To do that, it would need $1.94 EPS.
• Forward guidance. Apple tends to be cautious when projecting future earnings, preferring to under-promise and over-deliver. But traders are abnormally sensitive these days to recession signals, and if the company’s forward guidance is too conservative, it could be read as a sign that even Apple is starting to feel the pinch.
• Gross margins. As the AFB moderator who calls himself DawnTreader puts it: “Volume is nice. But high-margin volume is better.” He’s watching how much of each sales dollar flowed to cover operating costs and to the bottom line after manufacturing costs.
• Mac sales. This is the key to the quarter, according to Piper Jaffray’s Munster. “If Apple sells 2.3 million units, it would be a significant positive,” he wrote in a report to clients issued last week. “2.3 million Macs represents 43% y/y growth compared to 28% y/y in Dec-06 and 20% in Dec-05.”
• Deferred revenue. I don’t pretend to fully understand the significance of the tricky way Apple accounts for its iPhone and Apple TV revenue. But this is what DawnTreader says about it: “One of the most important numbers IMHO is the net pick-up in cash exclusive of deferred revenue liabilities. Net income and EPS is impacted by a number of non-cash expenses including depreciation and amortization. How much net cash exclusive of deferred revenue and other liabilities flowed to the balance sheet?” (link)

Got that? Good luck.

Reflecting strong holiday sales of both MacBooks and iPhones, Apple’s (AAPL) market share grew sharply in December, as measured by a Net Applications survey released today.

The Mac hit a record 7.3% share, up from 6.8% last month. The iPhone also hit a new record, .12%, up from .09% in November. That suggests that better than 1 out of every 1,000 people on the Internet are browsing the Web using an iPhone.

Microsoft’s (MSFT) Windows still dominates, with a 91.8% share as measured by the Web metrics company. But it lost ground in December, as it has for seven of the past 11 months.

The Mac OS share, by contrast, grew 7.4% in the past month, nearly double November’s rate. The iPhone grew even more sharply, jumping 33% over November’s numbers. Only the Playstation (.02% share) grew faster, albeit from a much smaller base.

Net Applications’ monthly surveys do not measure market share in terms of computer systems sold. Rather, they sample data from visitors to some 40,000 websites operated by the firm’s clients. As such, the findings are probably better described as a snapshot of installed base taken from a less-than-random sample. But the results tend to correspond well to domestic market share as measured by more traditional market survey firms like IDC and Gartner. To see Net Application’s full report, click here.

The Linux operating system also showed strong growth (up better than 10% to hit a .63% share), as did “other,” a category that includes the iPod touch, Web TV and the Nintendo Wii.

The results are summarized in the table below:

Despite fierce competition from machines with more than twice the memory and price points hundreds of dollars lower, Apple’s (AAPL) white 120 GB MacBook has captured the top spot on Amazon’s (AMZN) list of bestselling computers this Christmas eve.

Helped along by rebates ranging from $75 to $150, three Apple-brand notebooks are on the top 10 list this morning. The other bestsellers are the 80 GB MacBook (No. 7) and the 120 GB MacBook Pro (No. 10).

Price cutting among the competition is even steeper. HP’s (HPQ) 250 GB Pavilion (No. 5) is selling for $999.99, 27% off the $1,375 list price.

The least expensive computer on the list, at No. 8, is the $381 Linux-based Asus Galaxy with a 7-inch screen and 4 GB of flash memory rather than a hard drive. Many expect Steve Jobs to announce at Macworld that Apple is entering the market for flash-based notebook computes. Apple’s thin MacBook, however, is likely to be larger, carry more memory, and cost a whole lot more than $381.

In Amazon’s list of top-selling electronics, a late surge by a heavily discounted portable hard drive has pushed an iPod off the stack. Apple had five of the top 10 spots for much of the pre-Christmas shopping period; it’s now down to four. See here.

UPDATE: As of 2 p.m. ET, the MacBook has been edged aside at No. 1 by an HP Pavillion with 160 GB hard drive marked down 37% (including rebate) to $679.99.

BOXING DAY UPDATE: This morning, the day after Christmas, the MacBook is back on top.

Online shopping is up nearly 20% this Christmas, according to comScore Inc. (see here), and electronics is one of the hottest categories, up 24% from last year. So what gadgets are Americans buying this holiday season?

Judging from Amazon’s (AMZN) list of top sellers, a lot of iPods and iPod touches.

With only a couple shopping days left before Christmas, five out of the top 10 items on Amazon’s “bestsellers in electronics” list are Apple (AAPL) products, including the 4 GB iPod Nano (No. 1), the 8 GB nano (No. 4), the iPod touch, (Nos. 6 and 7) and the 80 GB iPod Classic (No. 8).

Apple does even better in the “most gifted in electronics” list, with six out of the top 10.

Also selling well on Amazon are GPS navigators (No. 2, 9 and 10), the Kindle reader (No. 3, on backorder) and a Canon digital camera (No. 5).

In Amazon’s computer department, the MacBook Pro and MacBook come in at No. 4 and 7, respectively, among a lot of HP (HPQ) and Asus machines.

The iPhone is not available on Amazon, but is reported to be selling briskly both here and in Europe. The rumor site 9to5Mac, citing unnamed sources, claims Apple is preparing to announce the sale of the 5 millionth iPhone next month at Macworld. That may be overly optimistic. Even as bullish an analyst as Piper Jaffray’s Gene Munster doesn’t expect Apple to have sold more than 3.7 million iPhones by mid January. (See Silicon Alley Insider here.)

SUNDAY UPDATE: Nearly 24 hours after this was first posted — and two days before Christmas — the list of Amazon top sellers in electronics is remarkably stable. The same five Apple products are still in the top 10. The Kindle and the Garmin nuvi 350 navigator have switched places at Nos. 2 and 3. And a Toshiba HD DVD player has moved, like a British Prime Minister, into No. 10.

CHRISTMAS EVE UPDATE: A late surge by a USB 160 GB portable hard drive from Western Digital (sale price: $99, down from $149) has pushed an iPod off Amazon’s top 10 list in electronics. Apple is down to four of the 10 spots. In the computer department, however, the 120 GB MacBook has moved into the No. 1 position, a smaller MacBook has taken No. 7 and a MacBook Pro is No. 10, giving Apple Inc. three out of the top 10 bestselling computers on Amazon this Christmas eve. (See here.)